Friday, March 13, 2009

Government Regulated Medical Programs Create Social Costs

Both cost effectiveness and comparative effectiveness of medical treatments do not consider the economic social costs imposed on the patient. These studies do not save money. They shift the costs from the medical system to the patient as social costs that have a measurable dollar value. The studies do not include these social costs.

For example, there are often two or more antibiotics to treat an infection. One is usually an older antibiotic that is cheaper and the other is newer and much more expensive. The older antibiotic often will eradicate some, but not all of the possible bacteria. The newer antibiotic will often eradicate a much broader range of bacteria in a shorter course of treatment time.

In a cost or comparative benefit comparison, the recommendation is always to prescribe the older antibiotic first. It is the cheaper. If the first antibiotic is unsuccessful, the uncured patient returns to the doctor after making another appointment. It is at the second appointment that the doctor writes the prescription for the second antibiotic.

The comparative and cost benefit analyses do not include the costs imposed on the patient. In our example, the costs imposed on the patient such as time off from work to go to the second doctor visit are not included. The social costs to the patient of the discomfort and suffering from the uncured ailment are not measured. The increased risks to the patient of having the ailment for a longer time such as having the infection spread, etc. are not included in the costs. The delay and wait time until a curable treatment is implemented is not measured in these studies.

The lack of measuring social costs in any government managed or regulated medical system allows the government to say it is saving money. When the studies include the dollar value of social costs, such as rationing, treatment and diagnosis delays, need for additional treatments and the risk of a worsening medical condition, the benefits of cost and comparative analyses disappears.

Remember, there is no free lunch. The profit motive constantly pushes all companies, even the medical providers, continually to reduce their costs as much as possible to maximize their profits. Part of the costs we pay enable us as patients to have quick access to doctors and quickly effective treatment. To reduce costs in the medical system means that some costs will shift out of the medical system to the consumer as social costs. The costs shifted to us will include rationing, delays, denials, older and cheaper medicines and technologies.

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